Executive summary

The European Union Deforestation Regulation (EUDR) has been amended (Regulation (EU) 2025/2650) to postpone the application date by 12 months, from 30 Dec 2025 to 30 Dec 2026. For small and micro enterprises and natural persons, EUDR implementation has been delayed until 30 Jun 2027, but only for products that were not already covered by the EU Timber Regulation ((EU) 995/2010 — EUTR). The European Union (EU) Commission will conduct a simplification review by 30 April 2026, which may lead to further changes.

The amendment also simplified the requirements for Downstream Operators and Traders (micro, small or medium (SME)) to mainly limit the collection of information and actions when there are substantiated concerns.

For small and micro Operators (not to be confused with SMEs), the amendment replaces the due diligence statement (DDS) submission with a simplified declaration.

In addition, printed books, newspapers, printed pictures and similar products were removed from the scope (e.g., Chapter 49, which refers to a category in the Harmonized System (HS) and the EU's Combined Nomenclature (CN) for customs classification).

Background

The EUDR (Regulation (EU) 2023/1115) mandates that certain products derived from cattle, cocoa, coffee, palm oil, rubber, soy and wood can only be placed on the EU market or exported if they are legally produced and not tied to recent deforestation or forest degradation.

The application date of the EUDR was previously postponed to 30 December 2025 for large companies, and 30 December 2026 for micro and small enterprises (see EY Global Tax Alert, EU Deforestation Regulation | Insights into proposed changes and latest guidance, dated 27 November 2024). Failing to comply with the EUDR may result in:

• Maximum fines of at least 4% of EU-wide annual turnover
• Product withdrawal or recall
• Confiscation of products or revenues

The EUDR only provides for a sanctioning framework, which Member States must follow when defining sanctions at the national level, but each Member State may add additional penalties and/or fines.

New timeline and requirements

The postponement is the result of external and internal pressures. Specifically, EU projections indicated higher-than-anticipated traffic on its TRACES NT (digital management and certification platform) and some businesses and trade partners raised concerns over administrative complexity and insufficient supplier information. To address these issues, the amendment extends the timeline by another year and reduces downstream obligations, while still aiming to uphold the main EUDR objectives.

Additionally, by 30 April 2026, the EU Commission is required to conduct a simplification review and present a report to the EU Parliament and Council, potentially including a legislative proposal; thus, the final requirements remain uncertain.

EUDR roles

The amendment affects the definition of the roles under the EUDR as follows:

• (First) Operator (unchanged): The first natural or legal person that places on the EU market or exports relevant products
• Downstream Operator (new): The natural or legal person who places on the market or exports products made using products already covered by a DDS or simplified declaration
• Trader (amended): Any other actor making products available on the market

Before the amendment, the EUDR required that all Operators and Traders submit a DDS to TRACES NT for each instance of placing/making available products on the market or exporting them, ensuring full traceability along the supply chain. Beyond the DDS submission, EUDR required providing geolocation coordinates for the original plots of land, implementing risk assessment and risk mitigation processes to ensure goods are sourced from non-deforested areas, and maintaining an operational due diligence system.

Downstream Operators and Traders

The amendment changes the DDS submission requirement concerning information collection duties. Before the amendment, every Operator or Trader had to file a DDS. Beginning in 2027, although a DDS is only required when a product is first placed on the market or exported, Downstream Operators and Traders must still collect certain supplier and customer data elements for in-scope transactions. If the direct supplier is an Operator, the DDS reference numbers/declaration identifiers must be collected.

Due diligence obligations are only required under the amendment in case of substantiated concerns. Downstream Operators and Traders must immediately notify National Competent Authorities (NCAs) and downstream recipients if they become aware of potential noncompliance for products already placed on the market. If compliance concerns arise before placing products on the market, non-SME Downstream Operators and Traders must verify that upstream due diligence was properly exercised (i.e., if the assessed risk is non-negligeable).

The amendment reduces checks by the NCAs so they only need to focus on Downstream Operators' and Traders' documentation reviews and make potential spot checks if questions arise.

Registration obligations are unchanged — all non-SMEs must register in the TRACES NT, even though they will not submit DDSs.

Micro and small primary operators

The EUDR applies to micro and small enterprises established in low-risk countries (all EU countries are classified as low-risk regarding deforestation under the EU's benchmarking country list dated May 2025) that meet the following criteria:

• The enterprise does not exceed at least two of the following thresholds:
• A balance sheet total of €5m
• A net turnover of €10m
• An average of 50 employees
• The enterprise places relevant products exclusively within that EU country in which those products were grown, harvested, obtained or raised by the enterprise itself

The amendment simplifies the required declaration. Instead of a DDS, micro and small primary operators can submit a one-time simplified declaration in TRACES NT when placing in-scope products on the EU market and they will receive a declaration identifier.

The amendment also simplifies the data requirements so the postal addresses of plots or establishments can be used instead of geolocation coordinates.

Scope and other technical changes

The amendment removed Chapter 49 printed books, newspapers, printed pictures and similar products (e.g., labels and manual instructions) from Annex I (list of all commodities in scope).

The amendment postponed the implementation date to 1 December 2029 for the platform enabling data transmission between national customs systems and the TRACES NT.

New application dates

• For Operators/Traders/NCAs: obligations apply from 30 Dec 2026.
• For natural persons as well as small and micro enterprises: obligations apply from 30 Jun 2027, but only for products that were not already covered by the EUTR.
• Products under EUTR scope that were produced before 29 June 2023, and placed on the market before 30 December 2026, will remain subject to EUTR (not EUDR) until 31 December 2029.

Implications for EU companies

For (non-SME) EU companies importing into the EU market or producing EUDR-relevant products, the requirements remain unchanged: full due diligence on the supply chain and geolocation data is required to submit a DDS in TRACES NT. Additionally, the DDS must be available to customs before release for free circulation or export. For exports, however, a DDS will be required only if EUDR-relevant products are manufactured from EUDR-covered commodity that has not been subject to Due Diligence and directly exported from the EU. Given the likelihood that, in most cases, no DDS will be available for exports, the feasibility of EUDR re-imports may be constrained, and how companies manage this in practice remains to be seen.

In addition, first Operators will also need to pass DDS reference numbers (or declaration identifiers) to Downstream Operators and Traders further down the chain.

For EUDR products already placed in the EU market and then sold within the EU, a DDS submission will no longer necessary upon a subsequent sale. However, because all entities with EUDR obligations must be registered in the TRACES NT, it will still be required to assess which entities have EUDR obligations. Companies that have not done so should perform an impact assessment across their EU entities to identify role-specific obligations (first Operator, Downstream Operator, Trader) by mapping the legal and physical flows of EUDR-relevant goods.

Furthermore, for EU purchases the obligation to collect information from suppliers remains, and products may not be placed on the market without the required information. While collecting supplier and customer data points may be relatively straightforward, Downstream Operators and Traders must confirm their position in the supply chain to determine if they need to collect DDS reference numbers or declaration identifiers, which entails supplier outreach or onboarding.

It is also important to ensure that due diligence can be conducted and that NCAs or downstream customers can be promptly informed if substantiated concerns arise.

In summary, although the EUDR simplifies certain obligations for Downstream Operators and Traders, some foundational work remains, and EU companies acting as first (non-SME) Operators must still complete the full due diligence exercise.

Implications for non-EU companies

For non-EU businesses, the responsibility remains with the first entity that places products on the EU market. As a result, EU affiliates and EU customers will need the required information to perform due diligence and submit DDSs as part of contractual agreements. This means non-EU companies must strengthen data quality, governance and documentation before negotiations.

As for EU companies, when a non-EU company imports products into the EU market, full Operator obligations still apply. This includes conducting due diligence and providing plot-level geolocation and evidence of legality before importation into the EU.

Importantly, the amendment does not remove Article 7, which means that if the first Operator is established outside the EU, the first EU-established natural or legal person making the products available on the market is also deemed an Operator. This can significantly increase compliance exposure for EU companies when a non-EU entity acts as importer of record or producer and seller of EUDR-relevant goods subject to due diligence. Therefore, these factors must be considered in commercial and operating model decisions.

Next steps

In-scope companies that have not started their EUDR journeys should consider:

• Conducting an impact assessment to identify in-scope products and transactions as well as entities to be registered in the TRACES NT
• Ensuring data readiness by cleansing product and supplier master data and verifying customs/HS code classifications against the amended scope
• Implementing compliance measures based on identified EUDR obligations and automating relevant processes where possible

In-scope companies that are prepared for entry into force of EUDR may use the delay and amendments to strengthen their approach by:

• Aligning systems and supply chain mapping with the latest changes and confirming new obligations and data requirements for each entity — even if only for (non-SME) Downstream Operator and Trader obligations
• Integrating procurement systems (e.g., Ariba, Coupa) and related processes into EUDR compliance processes
• Considering a master data platform approach that also captures the impacts and requirements of other ESG regulations intersecting with EUDR (e.g., Carbon Border Adjustment Mechanism (CBAM), Corporate Supply Chain Due Diligence Directive (CSDDD), Digital Product Passport, Packaging and Packaging Waste Regulations (PPWR))
• Establishing a grievance mechanism to handle and prepare internal policies and documentation for future audits
• Reviewing compliance strategies at the transactional level by adjusting the operating model and contracts
• Planning a phased supplier outreach strategy to collect the required information gradually throughout the year, accompanied by contractual clauses